Russia's Putin touts customs union to Ukraine

MOSCOW (Reuters) - President Vladimir Putin made a new attempt on Thursday to woo Ukraine, touting the economic benefits of joining a customs union with Russia and two other former Soviet republics.

Putin also said he was counting on Ukraine finding a political solution to its crisis over President Viktor Yanukovich's decision to spurn a free-trade agreement with the European Union in favor of closer economic ties with Moscow.

Demonstrations triggered by the decision have at times drawn hundreds of thousands into the streets of Kiev this month.

"I'm sure achieving Eurasian integration will only increase interest (in it) from our other neighbors, including from our Ukrainian partners ... I hope that all political sides can successfully reach an agreement in the interests of the Ukrainian people," Putin said in a state-of-the-nation address.

"Our integration project is based on equal rights and real economic interests," referring to a customs union with Belarus and Kazakhstan which Putin plans to develop into a political and trading bloc to be known as the Eurasian Union.

The EU, which had hoped to sign agreements with Yanukovich last month, has criticized Russia for putting economic and trade pressure on Ukraine over the decision.

On Wednesday, U.S. Assistant Secretary of State Victoria Nuland said Ukraine's "European future" could still be saved, and Brussels has repeatedly said the door to EU integration remains open.